Wall Street is hiring again according to a recent New York Times article. They didn’t lose that many jobs anyways compared to other sectors and considering that they caused the economic recession. In any case, they are hiring again.
The financial sector, although clearly not perfect, have always been the best predictors of economic recovery. So the fact that they are hiring now is an indication that they believe the worst is behind us and we have sunny days ahead. So what does that mean for the forex market?
Let’s first look at what happened to the currency market when the market first crashed in 2008. First of all, the currencies in emerging markets all tanked. As the environment was getting fearful, they were pulling their money out of risky assets causing the currencies of emerging markets to fall dramatically.
The ‘safe’ currencies like the US Dollar, Euro and currencies of other developed countries came into vogue. In addition, precious metals like gold and silver started to skyrocket. Although gold and silver are not currencies themselves, they have historically always been tied to it for a number of reasons.
For those who are looking at a long term forex investment in specific currencies, they should start eyeing the emerging markets again. The financial sector is giving us an indication of what they think is going to happen. If they are correct, emerging markets will be one of the first places to see and upturn, causing their currencies to rise.
The other kinds of currencies you want to look at are from commodity rich countries. As the economy recovers and people start getting jobs, demand for consumer goods will rise. When that happens, they will need raw materials to manufacture those consumer goods. That means currencies of countries like Canada, which is heavily dependent on commodities will rise.
These are just some of the ways you can profit from the coming economic upturn as predicted by the current Wall Street hiring that has been happening. There are many other forex trading currency strategies that you can leverage on this news. Even with the ones I mentioned, you can go several different ways with it as well.